The Securities Appellate Tribunal (SAT) on Monday refused to stay SEBI's order that barred them from holding key management positions in any listed firm, a report by Moneycontrol stated. According to the report, the SAT had reserved the case for orders on June 27 after hearing both ZEE Entertainment Chief Executive Officer (CEO) Punit Goenka and the SEBI at length.
According to news report, while senior counsel Janak Dwarkadas appeared for Goenka, lawyer Somashekar Sundaresan appeared for Subhash Chandra. The SEBI was represented by senior advocate Darius Khambata. On June 19, the counsel for ZEE Entertainment said the market regulator had no evidence beyond the bank statements to prove the allegations of round-tripping of funds, hence, it cannot pass an ex-parte order.
A SAT bench headed by Justice Tarun Agarwala said that there was no urgency to stay the order. The tribunal directed the ZEE promoters to file their response to the SEBI within two weeks. On June 15, the SAT refused to grant an interim order in Goenka's favour and directed the marker regulator to file its response to the plea in 48 hours.
The SEBI had, in an interim order, on June 12, said Subhash Chandra and Goenka had allegedly "abused their positions" for personal financial gains. It noted that the Mumbai-based media house had faked the recovery of loans to cover for private financing deals by its founder Subhash Chandra.
The regulator further alleged that the duo engaged in the alienation of assets belonging to ZEE Entertainment and other listed companies of Essel Group, with the aim of benefiting their associate entities.
The SEBI has imposed a one-year ban on ZEE Entertainment's Chairman Subhash Chandra and CEO Goenka for being actively involved in diverting company funds to the group's related entities, raising questions on the future of the ZEE-Sony merger. "The ZEE-Sony merger holds immense significance, regardless of my position as CEO. The resulting entity will be under Sony's control, and they have chosen to retain me as a promoter, MD and CEO," Goenka told the Economic Times.
Punit Goenka’s comments come after Sony on Wednesday said it took the SEBI’s ban on Chandra and Goenka "seriously" and will monitor developments that may affect the deal, which was announced in 2021. Zee, however, did not immediately respond to Reuters requests for comment.